A bill to bump up Idaho’s grocery tax credit survived a House vote Thursday.
Right now, full-time Idaho residents get $100 per person every year to help offset the state’s 6% sales tax on groceries.
This bill would raise that to $120 when people file their 2023 income taxes. Seniors would also get that $20 annual boost for a total of $140 per person.
But raising the tax credit still doesn’t completely cover a person’s basic dietary needs, based on the U.S. Department of Agriculture’s most affordable sample meal plan for Dec. 2021.
The plan outlines a monthly grocery budget of $863.40 for a family of four with two adults and two children. That same family would start paying Idaho’s grocery tax after exceeding $666.66 per month after the credit offset.
Still, the bill’s sponsor, Rep. Jim Addis (R-Coeur d’Alene), said that still means a family of four gets a break on up to $8,000 of groceries.
“I don’t think that’s insignificant,” Addis said.
Just a few minutes into debate, a bipartisan group of lawmakers tried to put the proposal up for amendments.
“It is time to remember the taxpayer,” said Rep. Ron Nate (R-Rexburg). “It is time to free the food.”
Nate and others have argued for years that completely repealing the tax is the fairest way to help state residents.
Inflation from Jan. 2021 to Jan. 2022 came in at 7.5% nationwide. It was even higher in the Mountain West region at 9%, according to Bloomberg.
“A 20% adjustment to the grocery tax credit in two years doesn’t adjust the problem and really doesn’t do anything,” if inflation keeps up its rapid pace, said Rep. John Gannon (D-Boise).
That effort to amend the bill eventually failed, though.
Still, House Minority Leader Ilana Rubel (D-Boise) said legislators shouldn’t just settle for anything.
“There is sometimes some danger in taking the something in lieu of nothing because the message goes out to the world sometimes that the problem’s been solved,” Rubel said.
Raising the tax credit would cost $32.4 million annually, with that money funded by online sales tax collections that are separate from Idaho’s general fund. Fully repealing the grocery tax adds up to $196 million every year.
Supporters of keeping the tax credit say this allows the state to capitalize on out-of-state visitors coming to resort areas or the backcountry who need to stock up on food.
In the past, they've also argued repealing the tax could open up a lengthy debate as to what grocery items would be classified as exempt foods.
In light of a projected $1.9 billion surplus, lawmakers and government officials have been scrambling to divvy up that cash.
The legislature quickly cut income taxes and bankrolled a tax rebate for Idahoans in a matter of weeks with a price tag of $600 million initially. Those costs soar to more than $1.5 billion over four years.
House Majority Caucus Chair Megan Blanksma (R-Hammett) said raising the credit is a simple step down the same path.
“We’re trying to return some of this surplus to taxpaying Idahoans and this bill does exactly that,” Blanksma said.
After a 40-27 vote in the House, state senators will take up the issue next.
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